The blow that bloggers are ought to take from GST
GST for Bloggers : The most trending topic in the nation right now is GST. GST, better known as Goods and Service Tax is considered to be the biggest tax reform since the Independence. The need to restructure the indirect taxation regime is what led to the evolution of GST. One of the biggest drawbacks of indirect taxation in our nation was the complexity that it posed. There are more than twenty indirect taxes that we, as citizens, need to pay right now and ensuring compliances to all such taxes is something that made it difficult for the citizens to conduct businesses. GST was designed with the prime objective of simplifying the tax structure and replacing all the taxes with only one indirect tax known as Goods and Service Tax.
The Government of India has announced the official date of launching GST and it is 1st July, 2017. GST is aimed to rejuvenate the taxation structure in India and to boost the economic growth manifolds. Since, the applicability of this indirect tax is at such a macro level; it is obvious that it would be affecting each and every sector of the economy whether it’s big or small. One such sector that is quite fretting about this revolutionizing scenario is the blogging and digital marketing sector. The main source of income for the bloggers is advertisement income which until now attracted service tax liability. Even the bloggers were very well accustomed in paying service tax @ 15%. But now, things are going to be the way they were rather they are going to be quite unfavorable for the bloggers.
The most fatal blow of GST on a blogger’s income is obligation of paying a tax of additional 3%. It means that the rate of Service tax which bloggers used to pay was 15% and now instead of it they are required to pay a GST of 18%. Section 24 of GST Act 2017 makes it mandatory for the bloggers to get themselves registered for GST. The documents so required for the purpose of GST registration are:
- Photograph of the authorized person
- Certificate of Registration
- Address proof (Proof of Principal Place of Business)
- Bank Statement
- One cancelled cheque
These are the documents that you would require to get yourself registered for GST. Adding to the sorrows of the bloggers, another adverse impact that the bloggers will be facing is that there is no such registration for the composition scheme in GST for bloggers. Since the services of the bloggers are considered to be an inter-state supply of service hence the option to get registered in the composition scheme is not available to the bloggers. Other than this, the government has fixed an exemption limit of Rs. 20 lakhs but this exemption limit is applicable only for those services providers/ dealers who engages in inter-state supply of services and hence the bloggers are being thrown out of the ambit of exemption limit. It means that you, as a blogger, have to get yourself registered in GST whether your turnover is Re. 1 or exceeding Rs. 20 lakhs. It is to inform you that not getting yourself registered in GST would invite penalties which have been mentioned below:
- Non-registration penalty would amount to upto Rs. 25,000
- Since you have not registered yourself for GST, you won’t be filing any returns and non filing of returns would attract a penalty of Rs. 100 per return per day. The concept of “per return” has been explained below.
Just like in case of other indirect taxes, even in GST, after registration you need to file regular returns. The process of filing returns is quite distinctive and unique as compared to the returns which were filed till now in case of other indirect taxes. Here is a brief overview:
- The details of all the sales/ supply of services for a month will be uploaded in the Sales Return by 10th of the next month.
- The details of all the purchases/ availing of services for a month will be uploaded in the Purchase Return by 15th of the next month.
- A consolidated return has to be filed by the 20th of the next month
Other than the above mentioned returns, there are other important points as well:
- All such GST need to be paid by 20th of the next month
- All invoices have to be uploaded on the government portal
Another crucial aspect of GST is the Place Of Supply. The Place of Supply will be the deciding factor regarding the livability of GST. Whether the GST will be applicable will depend on the fact as to where the services or goods are being supplied. Here are some important points regarding this mentioned below:
No such GST will be applicable if all the conditions mentioned below are fulfilled:
- The blogger is situated in India
- The recipient of the service has to be located OUTSIDE India.
- The payment for the services supplied has been received by the blogger in foreign currency
If all such conditions have been fulfilled then no such GST is required to be paid as this service will be regarded as export of service.
NOTE: It is to be noted that any income received from Google India will not be considered to be a Place of Supply of service outside India and hence GST will be applicable accordingly.
Other than above, the Place of Supply of service will be considered to be within India if any two of the below mentioned criteria are fulfilled:
- The address of the recipient of service is within the taxable territory of India
- Any such credit card or smart card or ATM card through which the recipient of services settles the payment has been issued within the taxable territory of India
- The address where all such billings are done and the IP address of the system or device used by the recipient is within the taxable territory of India
- The bank account through which the recipient makes payment is within the taxable territory of India
- The land line through which the service is received within India is situated within the taxable territory of India
- The country code used by the recipient of subscriber identity module card belongs to the taxable territory
If any two of the above mentioned points are fulfilled then GST will be leviable.
This is all about GST that a blogger should be aware of. This is just the beginning of GST wherein the bloggers would feel the pinch of paying extra taxes and would be burdened by increased expenditure on return filing. Let’s hope that in the coming future government might pay heed to our needs and give some sort of relaxation to us. Fingers crossed!!